Asst. Commissioner of Income Tax, Circle-9(1)., Hyderabad V. Jasti Seethamahalakshmi., Hyderabad

ITA 1185/Hyd/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2649 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 16-01-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 10-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: M CHANDRAMOULESWARA RAO
• Keywords: Tax effect
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1185/HYD/2017 ASSESSMENT YEAR: 2012-13 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-9(1), HYDERABAD VS SMT. JASTI SEETHAMAHALAKSHMI, PROP: M/S. KANAKA DURGA LORRY SERVICE, HYDERABAD [PAN: ANPPS9623R] (APPELLANT) (RESPONDENT) C.O. NO. 35/HYD/2017 (IN ITA NO. 1185/HYD/2017) ASSESSMENT YEAR: 2012-013 SMT. JASTI SEETHAMAHALAKSHMI, PROP: M/S. KANAKA DURGA LORRY SERVICE, HYDERABAD [PAN: ANPPS9623R] VS THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-9(1), HYDERABAD (CROSS-OBJECTOR) (RESPONDENT) FOR REVENUE : SMT. SUMAN MALIK, DR FOR ASSESSEE : SHRI M. CHANDRAMOULESWARA RAO, AR DATE OF HEARING : 16-01-2018 DATE OF PRONOUNCEMENT : 24-01-2018 O R D E R THIS IS AN APPEAL BY REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7, HYDERABAD, DATED 16-01-2017, ON THE ISSUE OF ALLOWANCE OF AN AMOUNT OF RS. 5,79,807/- BY THE CIT(A), DISALLOWED BY AO U/S . 40(A)(IA) OF THE INCOME TAX ACT [ACT]. I.T.A. NO. 1185/HYD/2017 & C.O.NO. 35/HYD/2017 :- 2 - : 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE, PROPRIETOR OF M/S. KANAKA DURGA LORRY SERVICE, PAID AN AMOUNT OF RS. 5 ,79,807/- TO M/S. TATA MOTORS FINANCE LTD., AS INTEREST. ASSESSING OFFICER (AO) DISALLOWED THE ABOVE AMOUNT ON THE REASON THAT ASSESSEE HAS NOT DEDUCTED TAX WHILE PAYING THE AMOUNT TO THE SAID TATA FINANCE LTD, INVOKING THE PROVISIONS OF SECTION 40(A)(IA). AS SESSEE CONTENDED BEFORE THE LD.CIT(A) THAT THE DISALLOWANCE I S NOT WARRANTED AS THE SAID COMPANY IS NOT UNDER BANKING REG ULATION ACT, 1949 AND THAT ASSESSEE OBTAINED A CERTIFICATE THAT THE COMPANY HAS DECLARED INCOME AS PER THE PROVISIONS OF INCOME TAX (11 TH AMENDMENT) RULES, 2012 AND NOTIFICATION NO. 37/2012, DT. 12-09-2012. HOWEVER, LD.CIT(A) CONSIDERED THAT ASSESS EE HAS PAID THE AMOUNT AS ON 31-03-2012 AND THE SAME WAS NOT OUTSTAN DING. THEREFORE, THE PROVISIONS OF SECTION 40(A)(IA) DOES N OT APPLY. HE FOLLOWED THE DECISION OF SPECIAL BENCH OF ITAT IN TH E CASE OF MERILYN SHIPPING AND TRANSPORT LTD., VS. ACIT REPORTE D AS 136 ITD 23 (SB) [16 ITR 1] (SB)(VISAKHA.)(TRIB.). REVENUE IS AGGRIEVED, HENCE PREFERRED THE PRESENT APPEAL. 3. THE CROSS-OBJECTION BY ASSESSEE, FILED BELATEDLY WITH 49 DAYS DELAY, IS IN SUPPORT OF THE LD.CIT(A) ORDER. IN THE GROUNDS, ASSESSEE SPECIFICALLY CONTENDED THAT REVENUE CANNOT PRE FER THE APPEAL AS THE TAX EFFECT DOES NOT EXCEED RS. 10 LAKHS A ND IS IN VIOLATION OF CIRCULAR NO. 21/2015 DT. 10-12-2015, AS TAX EFFECT IS ONLY RS. 1,91,336/-. THE DELAY IN FILING THE APPEA L IS SUPPORTED BY AN AFFIDAVIT EXPLAINING THE REASONS. THEREFORE, THE D ELAY IS CONDONED AND CROSS-OBJECTION IS ADMITTED. AS NOTED FROM THE ORDER OF AO AND ALSO FROM THE CROSS-OBJECTION RAISED, THE TAX EFFECT IS ONLY RS. 1,91,336/- AND HENCE REVENUE CANNOT PREF ER THE APPEAL I.T.A. NO. 1185/HYD/2017 & C.O.NO. 35/HYD/2017 :- 3 - : AGAINST THE ORDER OF CIT(A) VIDE CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015, BEARING F.NO.279/- MISC.142/2007-IT J(PT). 4. NOT ONLY THAT EVEN ON MERITS, AS ASSESSEE HAS OBTAIN ED CERTIFICATE FROM THE OTHER COMPANY THAT THE INCOME WAS OFFERED, AND AS THE PROVISIONS OF SECTION 201(1) HAVE NOT BEEN INITIATED BY THE AO, THERE IS NO MERIT IN REVENUE CONTENTION THAT THE ORDER OF CIT(A) IS NOT CORRECT. BOTH ON TAX EFFECT AND ON MERITS , REVENUE APPEAL IS NOT MAINTAINABLE, HENCE DISMISSED. CROSS-OB JECTION OF ASSESSEE IS IN SUPPORT OF CIT(A)S ORDER AND CONSIDE RED ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED AND CROSS-OBJECTION OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY, 2018 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 24 TH JANUARY, 2018 TNMM I.T.A. NO. 1185/HYD/2017 & C.O.NO. 35/HYD/2017 :- 4 - : COPY TO : 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-9(1 ), HYDERABAD. 2. SMT. JASTI SEETHAMAHALAKSHMI, PROP: M/S. KANAKA DURGA LORRY SERVICE, PLOT NO. 6, BLOCK NO. 17, AUTO NAGAR, HAYATHNAGAR MANDAL, HYDERABAD. 3. CIT (APPEALS)-7, HYDERABAD. 4. PR.CIT-7, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.